Framework for JO & JV

Eligibility Criteria

  1. Proven Coal Reserve
    10-15 Mn Ton (Exploration report should exists and provided)
  2. Quality
    NAR 5000 min, S – 0.7% max, TM – 22% max, Ash – 10% max
  3. Logistics
    Mine to Anchorage Point not more than 50 kms
  4. Statutory Compliance
    All-permits, government and local clearances, licenses should be available, updated and legally correct as per laws in Indonesia
  5. Mine Current Status
    Preferably be in operative condition or ready to operate

Roles & Responsibility

Investor

  • Makes upfront liquidity availability for mine development, expansions and production enhancement.
  • 100% Freehand in Mine Operation, Mine Administration & Coal MarketingFor Existing Mining Contractor terms to be reviewed, and given first preference to continue. Mine Owner to be part of Planning Committee
  • Will buy 100% coal producedExisting Coal Off-take (Sale) Agreements / Contracts to be reviewed, provisions to be made with mutual understanding

Mine Owner

  • Total local administration
  • Liaison with government statutory and administrative authorities, mining offices, local village heads and other bodies
  • Trouble Shooter

Salient features of contract

  • Title Name & Ownership of mine does not change
  • Mine Owners offers a raising contract with off-take to the investor for life of mine with defined term and conditions mutually agreed between the mine owner & investor
1
  • Investor requirements
  • NCND with intermediary company
  • Profile of mine owner and Company
  • Mine history and operation details
  • Note on major challenges in – mining concession area, controlling logistics up to anchorage point, competition and local/political interferences
  • COA of Coal (Single Mine Coal or Blended Coal, if blended then specification of independent blend component)
  • Questionnaire to be filled with detailed information while supporting documents to be produced in
  • Investor issues LOI after being satisfied with analysis of “Stage One”
  • Mine Owner issues FCO with defined terms of the JV/JO Business Model
  • Investor communicate, negotiate and arrive at a mutually agreed point
  • Draft copy of MOU is exchanged
  • Mine owner invites the investor to complete –
2
3
  • Investor visits Indonesia, hold first general interaction with mine owners
  • Documents of mine shared with investor
  • Mine visit
  • Discussion, reviews and MOU signing with an exclusivity period of 30-40 days due diligence – Technical, Legal, Mines & Geology, Mine Economics
  • Due Diligence report tabled, Investor makes final offer, to be legalized in –
  • Issues raised in the DD report are addressed and resolved
  • Mine owner shares final draft contract copy after complete positive discussion and communication
  • Investor signs FPA with Intermediary company & Mine Owner as co witness
  • Contract Agreement signed
  • Investor makes payment as per contract terms
4
5
  • Contract is executed on the ground
  • Mining and shipments initiated accordingly